Group 1: Earnings Performance - The Trade Desk reported quarterly earnings of $0.33 per share, exceeding the Zacks Consensus Estimate of $0.25 per share, and up from $0.26 per share a year ago, representing an earnings surprise of 32% [1] - The company posted revenues of $616.02 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 7.27%, compared to year-ago revenues of $491.25 million [2] - Over the last four quarters, The Trade Desk has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - The Trade Desk shares have declined approximately 52% since the beginning of the year, while the S&P 500 has only declined by 4.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.42 on revenues of $676.51 million, and for the current fiscal year, it is $1.79 on revenues of $2.84 billion [7] - The estimate revisions trend for The Trade Desk is currently unfavorable, resulting in a Zacks Rank 5 (Strong Sell) for the stock, indicating expected underperformance in the near future [6] Group 3: Industry Context - The Internet - Services industry, to which The Trade Desk belongs, is currently in the bottom 40% of over 250 Zacks industries, suggesting that the industry outlook can materially impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Q1 revenue reached $616 million, representing a 25% year-over-year increase [48] - Adjusted EBITDA for the quarter was $208 million, reflecting a 34% margin [48] - Adjusted net income was $165 million, or $0.33 per fully diluted share [52] - Free cash flow was $230 million in Q1 [52] Business Line Data and Key Metrics Changes - CTV (Connected TV) remains the largest and fastest-growing advertising channel, representing a high 40s percentage share of the business [49] - Mobile accounted for a mid-30s percentage share of spend, while display represented a low double-digit share and audio around 5% [49] - The adoption of the Kokai platform accelerated, with about two-thirds of clients now using it, ahead of schedule [62] Market Data and Key Metrics Changes - North America represented approximately 88% of spend, while international markets accounted for about 12% [49] - International growth outpaced North America for the ninth consecutive quarter, particularly driven by CTV [50] Company Strategy and Development Direction - The company aims to capture market share in a more competitive landscape, especially as walled gardens face increased scrutiny [12][19] - The focus is on enhancing the supply chain through innovations like OpenPath and the acquisition of Sincerra [24][29] - The company is optimistic about the future of the open Internet and believes it is well-positioned to benefit from recent antitrust developments against competitors like Google [42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic uncertainties and continue to grow [54] - The company anticipates revenue of at least $682 million in Q2, reflecting a 17% year-over-year growth [55] - Management highlighted the importance of being a trusted partner for clients during uncertain times [78] Other Important Information - The company has no debt and ended the quarter with approximately $1.7 billion in cash and short-term investments [52] - A new COO, Vivek Tundra, has been appointed to help drive growth [40] Q&A Session Summary Question: Can you elaborate on the progress from product and go-to-market changes? - Management noted that Q1 was strong, with significant upgrades contributing to performance and Kokai adoption accelerating [60][62] Question: What are the implications of the Google trial verdict for DSPs? - Management believes the verdict will lead to a fairer market, allowing the company to compete more effectively [72][73] Question: How does the company view Q2 guidance amid uncertainty? - Management remains optimistic about growth opportunities and the ability to support clients through strategic consulting [78][80] Question: How is the competitive landscape evolving, particularly with Amazon? - Management sees Amazon's focus on Prime Video as a limitation and believes the company can capture market share by aligning interests with buyers [85][90] Question: What progress is being made with OpenPath? - Management highlighted the positive developments and new partnerships through OpenPath, despite the current uncertainty in the upfront market [93]

Financial Data and Key Metrics Changes - Q1 revenue reached $616 million, representing a 25% year-over-year increase [45] - Adjusted EBITDA for the quarter was $208 million, reflecting a 34% margin [45] - Adjusted net income was $165 million, or $0.33 per fully diluted share [49] - Free cash flow was $230 million in Q1 [49] Business Line Data and Key Metrics Changes - CTV (Connected TV) remains the largest and fastest-growing advertising channel, representing a high 40s percentage share of the business [46] - Mobile accounted for a mid-30s percentage share of spend, while display represented a low double-digit share and audio around 5% [46] - The adoption of the Kokai platform accelerated, with about two-thirds of clients now using it, ahead of schedule [60] Market Data and Key Metrics Changes - North America represented approximately 88% of spend, while international markets accounted for about 12% [46] - International growth outpaced North America for the ninth consecutive quarter, driven by CTV [47] Company Strategy and Development Direction - The company aims to capture market share in a more competitive landscape, particularly in the open Internet space [19][40] - Innovations like OpenPath and the acquisition of Sincerra are expected to enhance supply chain efficiency and transparency [24][28] - The focus remains on maintaining independence and objectivity to differentiate from competitors like Google and Amazon [45][82] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate macroeconomic uncertainties and continue to grow [51] - The outlook for Q2 anticipates revenue of at least $682 million, reflecting a 17% year-over-year growth [51] - The company is optimistic about the open Internet's prospects following recent antitrust rulings against Google [19][70] Other Important Information - The company has no debt and ended the quarter with approximately $1.7 billion in cash and short-term investments [49] - A significant share repurchase program was executed, with $386 million of Class A common stock repurchased [50] Q&A Session Summary Question: Can you elaborate on the progress from product and go-to-market changes? - Management highlighted strong Q1 performance and noted that upgrades contributed to outperformance, with Kokai adoption ahead of schedule [56][60] Question: What are the implications of Google's antitrust verdict for DSPs? - Management believes the verdict will create a fairer market, allowing the company to compete more effectively against reduced competition from Google [65][70] Question: How does the company view Q2 guidance amid uncertainty? - Management remains optimistic, citing strong underlying business fundamentals and the ability to assist clients in navigating challenges [72][75] Question: How is the competitive landscape evolving, particularly with Amazon? - Management views Amazon's focus on Prime Video as a limitation, asserting that the company’s CTV growth is outpacing Amazon's advertising growth [80][82] Question: What progress is being made with OpenPath and expectations for the upfront? - Management anticipates a stronger performance for programmatic advertising during the upfronts, with ongoing improvements in OpenPath [90][92]

Revenue and Income - Revenue for the three months ended March 31, 2025, increased by $125 million, or 25%, to $616,021 thousand compared to $491,253 thousand for the same period in 2024[79] - Net income for the three months ended March 31, 2025, was $50,678 thousand, a decrease of $19,018 thousand or 60% compared to $31,660 thousand for the same period in 2024[79] Expenses - Platform operations expenses increased by $39 million, or 38%, to $142,839 thousand for the three months ended March 31, 2025, primarily due to higher hosting and personnel costs[90] - Sales and marketing expenses rose by $31 million, or 25%, to $152,743 thousand for the three months ended March 31, 2025, driven by increased personnel and marketing costs[93] - Technology and development expenses increased by $25 million, or 23%, to $132,402 thousand for the three months ended March 31, 2025, mainly due to higher personnel costs[95] - General and administrative expenses increased by $4 million, or 3%, to $133,585 thousand for the three months ended March 31, 2025, primarily due to higher administrative and personnel costs[97] Other Income and Cash Flow - Total other income, net, increased by $4 million for the three months ended March 31, 2025, primarily due to higher interest income on cash and cash equivalents[99] - For the three months ended March 31, 2025, net cash provided by operating activities was $291 million, an increase from $185 million in the same period of 2024[113] - The company’s cash flow from operating activities is influenced by growth in operations and the timing of collections from clients[114] Working Capital and Credit Facilities - As of March 31, 2025, the company had working capital of $2,174 million, including $1,119 million in cash and cash equivalents[102] - The company has $443 million available under the Amended Credit Facility as of March 31, 2025, net of $7 million in outstanding letters of credit[108] - The Amended Credit Facility matures on June 15, 2026, and the company was in compliance with all covenants as of March 31, 2025[109] Share Repurchases - The company repurchased 6.3 million shares of Class A common stock for $400 million during the three months ended March 31, 2025, with $631 million remaining available for future repurchases[112] - The company has a total of $1 billion authorized for share repurchases as of January 2025, following an additional $564 million authorization[112] Future Outlook - The company expects operating expenses to continue to increase in the foreseeable future as it invests in platform operations and technology[83] - The company anticipates growth opportunities in international markets, particularly in Europe and Asia, despite potential compliance and regulatory challenges[84] Investment and Foreign Exchange Risks - A hypothetical one percentage point change in interest rates would result in a corresponding increase or decrease in investment income of approximately $6 million annually[132] - An immediate 10% adverse change in foreign exchange rates would result in a foreign currency loss of approximately $31 million as of March 31, 2025[133] Lease Commitments - The company has non-cancelable operating lease commitments totaling $724.4 million as of March 31, 2025[125]

Financial Performance & Growth - The Trade Desk's revenue in 2024 reached $2445 million[12], representing a 26% increase from $1946 million in 2023[11] - Adjusted EBITDA for 2024 was $1011 million[12] - Gross spend on the platform in 2024 amounted to $12041 million[10], a 25% increase from $9611 million in 2023[10] - Q1 2025 revenue increased by 25% year-over-year, reaching $616.021 million compared to $491.253 million in Q1 2024[111] - Adjusted EBITDA for Q1 2025 was $207.875 million, compared to $161.734 million in Q1 2024[116] Market & Strategy - The open internet represents a $935 billion+ market[18] - The company emphasizes its role as an objective, independent, and transparent technology partner for agencies and brands[97, 49] - Connected TV (CTV) is highlighted as the largest and fastest-growing channel for the company[110] Global Reach - Approximately 12% of The Trade Desk's spend occurred internationally in 2024, while about 88% was in North America[91]

Financial Performance - Revenue for Q1 2025 was $616 million, representing a 25% year-over-year increase from $491 million in Q1 2024[3] - Net income for Q1 2025 was $51 million, with a net income margin of 8%, compared to $32 million and a 6% margin in Q1 2024[3] - Adjusted EBITDA for Q1 2025 was $208 million, with an adjusted EBITDA margin of 34%, up from $162 million and 33% in Q1 2024[3] - Net income for Q1 2025 was $50,678,000, a 60% increase from $31,660,000 in Q1 2024[22] - Adjusted EBITDA for Q1 2025 reached $207,875,000, compared to $161,734,000 in Q1 2024, reflecting a 28.5% growth[24] - Non-GAAP net income for Q1 2025 was $164,993,000, up from $130,868,000 in Q1 2024, indicating a 26% increase[24] - GAAP diluted earnings per share for Q1 2025 was $0.10, compared to $0.06 in Q1 2024, reflecting a 66.7% increase[24] Customer Metrics - Customer retention rate remained over 95% for the past eleven consecutive years[4] Future Projections - The company expects revenue of at least $682 million and adjusted EBITDA of approximately $259 million for Q2 2025[7] Acquisitions and Integrations - The acquisition of Sincera, a digital advertising data company, was completed in Q1 2025, aimed at enhancing the platform's capabilities[7] - OpenPath integration has led to significant improvements, including an 8.6x increase in inventory fill-rate and a 97% revenue increase for NY Post[7] Stock Repurchase - The company repurchased $386 million of its Class A common stock in Q1 2025, with $631 million remaining authorized for repurchases[7] - The company repurchased $386,250,000 of Class A common stock during Q1 2025, compared to $125,280,000 in Q1 2024, showing a significant increase in share buybacks[22] Operational Metrics - The company reported a net cash provided by operating activities of $291,433,000 for Q1 2025, an increase from $185,472,000 in Q1 2024, representing a growth of 57%[22] Balance Sheet - Total current assets decreased to $4,856,335,000 as of March 31, 2025, down from $5,336,458,000 as of December 31, 2024, representing a decline of 8.9%[20] - Cash and cash equivalents at the end of Q1 2025 were $1,118,545,000, down from $1,369,463,000 at the beginning of the period, a decrease of 18.4%[22] - Total liabilities decreased to $2,988,757,000 as of March 31, 2025, from $3,162,806,000 as of December 31, 2024, a reduction of 5.5%[20] - Total stockholders' equity decreased to $2,716,684,000 as of March 31, 2025, from $2,949,145,000 as of December 31, 2024, a decline of 7.9%[20] Leadership Changes - Vivek Kundra was appointed as Chief Operating Officer, bringing extensive operational expertise to drive growth and efficiency[4]

Core Insights - The Trade Desk (TTD) emphasizes the rapid rise of high-quality internet centered around Connected TV (CTV), which enhances brand engagement and consumer trust [1][2] - TTD's strategy focuses on creating immersive experiences to capture consumer attention and improve purchase intent [1][2] Industry Trends - CTV is becoming increasingly prevalent, with 41% of UK consumers and 44% of US consumers significantly increasing their streaming service subscriptions and viewing time, respectively [2] - The global CTV advertising market is projected to reach a record $35.2 billion in 2024, growing 20% year-over-year, and is expected to rise to $46.3 billion by 2026 [3] Advertising Ecosystem - High-quality content platforms contribute nearly 50% of the Open Internet advertising revenue, showcasing their central role in the global advertising market [3] - 94% of advertisers report that CTV ad performance meets or exceeds their expectations [2] Brand Strategy - TTD observes a shift in Chinese brands' approach to international marketing, moving from a focus on ROI to brand storytelling and awareness [4][5] - The three key elements for successful brand globalization are brand building, precise targeting, and long-term value [5] Market Focus - TTD is concentrating on industries such as consumer electronics, smart home, gardening, and cultural exports, aligning with the trend of brands transitioning from a volume-based to a brand-centric approach [6]

Core Viewpoint - The Trade Desk, Inc. (TTD) is expected to report a decline in earnings and revenues for Q1 2025, with challenges arising from competitive pressures and macroeconomic uncertainties [1][5][17]. Financial Performance - The Zacks Consensus Estimate for TTD's earnings in Q1 2025 is 25 cents, down from 26 cents in the same quarter last year, with a revenue estimate of $574.3 million, indicating a 16.9% year-over-year decline [1]. - TTD anticipates revenues of at least $575 million, reflecting a 17% year-over-year growth, despite challenges from the previous leap year and reduced political ad spending [2]. Earnings Surprise History - TTD has consistently beaten the Zacks Consensus Estimate for earnings in the past four quarters, with an average earnings surprise of 7.68% [2]. Market Position and Competition - The digital advertising industry remains highly competitive, with major players like Alphabet and Amazon exerting pressure on TTD's market position [5][17]. - TTD's stock has declined by 58.1% over the past six months, underperforming both the Internet Services industry and the S&P 500 composite [10]. Strategic Initiatives - TTD is focusing on international expansion, reorganization, and structural improvements to enhance internal effectiveness and scalability [9]. - The company is advancing its support for UID2, a privacy-centric identity solution, which is expected to improve digital advertising relevance and user control [8]. Valuation Metrics - TTD's stock is considered expensive, trading at a forward 12-month Price/Sales ratio of 9.08X, compared to the industry's 4.89X [14]. Investment Considerations - Given the negative Earnings ESP and Zacks Rank 5, it is suggested that investors consider offloading TTD stock from their portfolios [4][18].

Core Insights - The Trade Desk (TTD) is a $27 billion digital advertising platform that enables programmatic ad space purchasing across various channels and mediums [1] - The platform allows ad buyers to create, manage, and optimize data-driven campaigns across multiple devices, including computers, mobile devices, and connected TVs [2] - The company has faced declining earnings expectations, with a projected quarterly EPS of $0.25, reflecting a year-over-year decrease of 3.9% [5] - Revenue expectations remain strong at $574.27 million, indicating a 16.9% increase from the previous year [7] Company Overview - The Trade Desk operates a self-service, cloud-based platform for digital advertising, allowing for automated campaign management and optimal ad space acquisition [2] - The company was co-founded by Jeffrey Green, who previously co-founded AdECN, a demand-side advertising platform acquired by Microsoft [4] Earnings Expectations - The upcoming earnings report is anticipated to show a decline in EPS, with full-year 2025 estimates dropping over 10% [6] - The Zacks Rank indicates a -9.45% Earnings ESP for TTD, suggesting potential challenges in profit momentum [8]

Core Viewpoint - The Trade Desk (TTD) has an average brokerage recommendation (ABR) of 1.62, indicating a general consensus towards a "Buy" rating, but caution is advised as brokerage recommendations may not reliably predict stock performance [2][5][10]. Brokerage Recommendations - The ABR of 1.62 is based on recommendations from 37 brokerage firms, with 24 ratings classified as "Strong Buy" and 3 as "Buy," representing 64.9% and 8.1% of total recommendations respectively [2]. - Despite the positive ABR, studies suggest that brokerage recommendations often lack success in guiding investors towards stocks with significant price appreciation potential [5][10]. Analyst Bias and Limitations - Analysts from brokerage firms tend to exhibit a positive bias in their ratings due to vested interests, leading to a disproportionate number of "Strong Buy" recommendations compared to "Strong Sell" [6][10]. - This misalignment of interests may result in misleading guidance for retail investors regarding future stock price movements [7][10]. Zacks Rank Comparison - The Zacks Rank, a proprietary stock rating tool, categorizes stocks based on earnings estimate revisions and is considered a more effective indicator of near-term stock performance compared to ABR [8][11]. - The Zacks Rank is updated more frequently and reflects changes in earnings estimates promptly, providing a timely assessment of stock price predictions [12]. Current Earnings Estimates for TTD - The Zacks Consensus Estimate for TTD's earnings has decreased by 4.6% over the past month, now standing at $1.79, indicating growing pessimism among analysts regarding the company's earnings prospects [13]. - This decline in earnings estimates has contributed to a Zacks Rank of 5 (Strong Sell) for TTD, suggesting a potential risk for the stock to decline further [14].